Supreme Court Requests Response in OCIP Case
The Texas Supreme Court has requested a response from an injured worker in an OCIP case involving the exclusive remedy doctrine.
The case, TIC Energy & Chem., Inc. v. Martin, No. 15-0143 (pet. filed Feb. 20, 2014), arose from a negligence action filed following the occurrence of a personal injury sustained by the employee in the course and scope of his employment with his general contractor employer, Union Carbide. The defendant is a subcontractor of Union Carbide and was enrolled in Union Carbide’s general workplace insurance plan (an OCIP).
The question presented in the case is whether a negligence action against a statutory “deemed employee” of the employer is barred by the exclusive remedy provisions of the Texas Workers’ Compensation Act.
In TIC Energy & Chem., Inc. v. Martin, No. 13-14-00278-CV, 2015 WL 127777 (Tex. App. Jan. 8, 2015) the 13th Court of Appeals held that the Act did not bar the workers’ suit against the subcontractor because two provisions of the Act are in “irreconcilable conflict.” The court wrote that § 406.123(e) unambiguously states that the general contractor is deemed the “employer” of the subcontractor for purposes of the Act, but that § 406.122(b) unambiguously states that the subcontractor is not deemed an “employee” of the general contractor for workers’ compensation purposes.
The subcontractor’s argument in a nutshell:
The opinion below raises serious policy concerns regarding multi-tiered contractor projects operating under a general workplace insurance plan. In particular, the opinion arguably makes the exclusive remedy provision of the Texas Workers’ Compensation Act a one-way street. Employees of subcontractors are barred from suing the general contractor (as provided by HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (Tex. 2009)), but employees of the general contractor, on the other hand, are permitted to sue the subcontractors, their fellow “deemed employees.”
This conclusion directly contradicts the opinions of three other courts of appeals interpreting Texas Labor Code § 406.123 under the same or similar circumstances. As a result, similar common law actions will be barred, yet others allowed to proceed, based entirely on which court of appeals has jurisdiction over the case.
The employee’s response to the petition for review is due to be filed May 26, 2015.
Two bills have been filed in the Legislature this session, apparently in response to the trial court’s judgment in the case. HB 1668 by Rep. Paul Workman (R-Austin) was reported favorably out of the House Business & Industry Committee on April 21, 2015, and has been sent to the House Calendars Committee. The bill provides that a subcontractor who is operating as an independent contractor and who has, pursuant to a written agreement with the general contractor, assumed the responsibilities of an employer for the performance of the work, may nevertheless enter into a written agreement whereby the general contractor provides workers’ compensation coverage to the subcontractor and the employees of the subcontractor.
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